The South Asia earthquake decimated Balakot, a picturesque valley town in northern Pakistan. But not even the awesome forces of nature could manage the fatal stroke that government officials are now planning - to wipe the town off the map.

Seismologists warn that Balakot, where about 2,500 people died in last October's earthquake, sits on four volatile fault lines and is too dangerous for human habitation, so the president, Pervez Musharraf, has approved a radical solution: the entire population of 25,000 will pack their bags and move.

Authorities have declared the town a "red zone", frozen construction work and chosen a new site 15 miles away. It is estimated the move will take between three and five years.

"This is the first time in the history of Pakistan that we are relocating a city. I'm sure it won't be smooth sailing," said Shakeel Qadir Khan, the top government official in Mansehra, a district that includes Balakot.

Although not yet confirmed, officials expect the new town to be located at Bakrial, a 600-acre (240-hectare) site of rocky, hilly land. Shifting there raises logistical and legal issues but the greatest obstacles may be human. Six months after the quake, which had a magnitude of 7.6 and killed 79,000 people across the region, residents are still struggling to get back on their feet. Some say it is too soon for another upheaval.

"We could die here, we could die there; wherever you go there is death," said Amjad Awan, 40, an English and Urdu teacher, shaking his head in despair. He spoke beside a mass grave at the town's government high school, where 125 teenage boys are buried beside the basketball court. "I lost nine relatives here. How can I leave their graves behind?"

The move is one of several thorny issues facing the government, which has just begun a $6.5bn (£3.6bn) internationally funded reconstruction drive. Across the quake zone some 2.5 million people are homeless.

In Balakot, as elsewhere, there is little evidence of rebuilding. Shops have sprung back to life but most residents still live in rough shelters among the rubble. The police station is in a tent.

Schools have reopened but at reduced capacity and in temporary buildings. Private groups ranging from mobile phone companies to Islamic charities - some with jihadi links - are running makeshift hospitals.

Mr Khan described the Bakrial site as a "wasteland" but said it had several advantages. Its hilly land would facilitate water and sewage systems, it is close to the Karakoram highway, and 80% of the land is owned by the government. Thousands of homes will be built and traders will also be assisted. "It will be a shop for a shop, a petrol station for a petrol station," he said.

Fears of residents being forced to move were misplaced, said Mr Khan. "This is entirely voluntary." But the relocation of government services and the enforcement of a strict construction code would give many residents little choice but to leave, he said.

Townspeople on Balakot's rutted main street said they knew little about the move. Those with frayed nerves from frequent aftershocks welcomed a new life elsewhere. "There are tremors every second day. My children are frightened, I can see it in their eyes," said Aurungzeb, 55, a refugee.

On a nearby hillside Gulshan Bibi, 40, a mother of four, sat outside on a tattered sofa she had salvaged from the rubble of her house: "If they send us, we will go. What else do we have left here?"

Compensation

But businessmen and landlords are digging their heels in. "We have invested millions of rupees here. We can't just leave it behind," said Abdul Rauf, secretary general of the Balakot Traders Association. If the government offered generous compensation "we can talk about it".

Others have a more sentimental attachment to the town. Balakot was the scene of a major battle between Muslim and Sikh armies in 1831, and there is still a shrine to the martyr Sayed Ahmed Shaheed. Before the October earthquake it was a gateway for tourists on their way to the Kaghan valley. Less famously it was also a clandestine training hub for jihadi militants fighting Indian forces in nearby Kashmir.

Balakot's nazim (mayor), Junaid Qasim, said many residents wanted the government to build a new earthquake-proof town on the present site.

Too expensive

But Mr Khan said that would be too expensive. Time was running out, he said. "There might not be another earthquake for another 100 years. Or it could be in the next hour."

Although the government has a huge sum at its disposal, it faces a gargantuan task. Tensions are brewing between tenants and landlords over a £1,600 compensation payment. Mountain roads are blocked, skilled labour is short, and 6m tonnes of cement must be found in the next six months.

"There will always be criticism. What was built in 58 years was destroyed in 58 seconds. Now the expectation is that it can be rebuilt in 58 weeks," said Altaf Saleem, chairman of the government's Earthquake Rehabilitation and Reconstruction Authority.

And no amount of money can salve the pains of the heart. Mr Awan recalled how he passed a man pinned under a pillar on the day of the quake. Ignoring the man's calls for help, he pressed ahead to find his own family. When he returned, the man was dead.

The image still haunts him. "Every time I go past that place my conscience is affected. I can never forget it," he said.

In numbers The total number killed across the region in the 7.6 magnitude earthquake on October 8 2005:79,000

The death toll in Balakot - a city with a population of 25,000:2,500

The estimated number of schools destroyed in the earthquake zone:7,000